A Massachusetts research scientist is in trouble over allegedly illicit stock trades, including in Mattress Firm Holding Corp. Authorities allege he searched the internet for tips on how to avoid detection for insider trading. less

A Massachusetts research scientist is in trouble over allegedly illicit stock trades, including in Mattress Firm Holding Corp. Authorities allege he searched the internet for tips on how to avoid detection for ... more

Photo: Thomas B. Shea /For The Houston Chronicle

Photo: Thomas B. Shea /For The Houston Chronicle

Image
1of/1

Caption

Close

Image 1 of 1

A Massachusetts research scientist is in trouble over allegedly illicit stock trades, including in Mattress Firm Holding Corp. Authorities allege he searched the internet for tips on how to avoid detection for insider trading. less

A Massachusetts research scientist is in trouble over allegedly illicit stock trades, including in Mattress Firm Holding Corp. Authorities allege he searched the internet for tips on how to avoid detection for ... more

Conducting an online search on how to evade detection for insider trading didn’t help a Massachusetts research scientist from getting caught for allegedly making illegal trades.

The Securities and Exchange Commission said in a complaint Wednesday that Fei Yan, 31, of Cambridge, searched the internet for “how sec detect unusual trade” before loading up on stock and options with insider information ahead of two corporate acquisitions.

Yan learned about the deals from his wife, an associate at the law firm that worked on the deals, the SEC said in an announcement Wednesday. The SEC had flagged Yan’s trades as suspicious.

The U.S. attorney’s office in Manhattan simultaneously arrested Yan and charged him with two counts of securities fraud and one count of wire fraud. He could face up to 25 years in prison and a maximum fine of $5 million on the securities fraud counts.

Prosecutors allege Yan viewed various articles on the internet, including “Want to Commit Insider? Here’s How Not to Do It” before buying Stillwater options.

“As we allege today, Yan dug too deep,” FBI Assistant Director-in-Charge William Sweeney said in a statement. “Researching how to evade detection, Yan allegedly used an internet search engine as an accomplice. But it doesn’t take much to understand the rules against insider trading, or how to break them.”